Weekly Wrap Up

Saturday, March 20, 2021

Dear Your Overseas Dream Home Reader,

$36,632 in Six Weeks

On February 4, I brought RETA members the chance to own luxurious condos in Sunrise, in the heart of master-planned Corasol…

Corasol is an exceptional community just a stone’s throw from booming Playa del Carmen on Mexico’s Riviera Maya. You can easily walk or cycle downtown to Playa’s famed Fifth Avenue with its hundreds of restaurants, bars and millions of annual visitors.

Our RETA price was $192,800. I see the same condos RETA members could lock down for that are now listing for $229,432. Not only did we pay much less, but we also got to choose the best units before regular retail buyers even get a look in…

But that’s just the start in my view. I figure three years after delivery these condos will be worth $300,000. And I think I am being really conservative.

Just six weeks after RETA members could buy in an off-market deal for $192,800, the same condos are listing for $229,432. This is just the start though…I predict much bigger gains in the next three years.

If you are one of the RETA members who bought a condo in Sunrise at Corasol, again I say congratulations. It’s a killer deal.

• You have a red-hot, year-round rental pool in Playa. I reckon you can gross annual rental yields of $24,000. That’s based on 120 nights at an average of $200 per night. It’s a gross yield of 12.44%.
• Playa was already a global hub of digital nomads and work-from-anywhere professionals before the pandemic set millions of people loose from the office. The Riviera Maya is seeing an enormous surge of folks seeking longer-term rentals. This is a great option to have, meaning we can rent for $2,500 or so a month for two or three months at a time.
• A nice kicker to any great deal in Playa is that there’s a host of property managers to choose from with all the infrastructure that makes hands off management of any rental straightforward.
• And Corasol is an amazing place to spend time…like a pristine Caribbean island, with golf and a full-on adult playground. (It’s great for families too.) Right next to a buzzing vibrant beach city.

The Perfect Climate?

I’m on the road again. This weekend I’m scouting the Lake Chapala region of Mexico. It’s a contender for “best climate on the RETA beat.”

I’m checking out a lakefront community that I think could be a gamechanger. It’s early days though. This is only the first step in snagging a RETA deal.

(If you’re interested in how I find and negotiate these special off market deals you can check out my report: Roadmap of a RETA Deal: The Easiest Way to Get in on Profitable Real Estate.)

Lake Chapala is Mexico’s largest lake, and the surrounding area is also home to the largest concentration of expats in the world. It’s about an hour south of Guadalajara where I’ve spent the last few days.

Two quaint towns, Chapala and Ajijic (ah-hee-heek) support most of the expat population, with Ajijic holding the edge when it comes to numbers. Both communities are nestled along the lake’s shoreline and separated by only a few miles.

Daily temperatures are almost always 75 F to 78 F, under bright blue sky and sunshine. Rain, when it happens, is usually at night.

Best climate on my beat? Could be…this is Lake Chapala in Mexico where it usually only rains at night.

From Lake Chapala I’ve heading to Puerto Vallarta to vet some potential opportunities.

And from there I’m going to follow a Path of Progress up the coast to check out the grand vision of an oceanfront community…

More notes from the road next week.

Stay tuned.

Wishing you good real estate investing,

Ronan McMahon, Real Estate Trend Alert

Your Comments and Questions David says: Are all advertised deals cash only or are there financing options available for U.S. citizen buyers for any of them? Ronan says: Hi David. Your financing options will change depending on where you plan to buy. In Europe, you can generally get bank financing. As a foreigner, you’ll pay a slightly higher rate than an EU citizen, however, as it stands, rates are incredibly low. In Portugal for instance, banks are lending to foreigners at incredible low rates—as little as 1% to 1.5%—with sometimes as much as 80% loan to value. When looking for financing in Latin American, it gets a little trickier. Walk into a bank in Mexico or Costa Rica, for example, and if you are very lucky, they might lend you 60% and charge you 12% for the privilege. That’s after they’re done weighing you down with excruciating bureaucratic requirements. Then, and only then, will they decide whether to let you borrow money—they might still refuse. One workaround I use for members of my Real Estate Trend Alert group is to negotiate pre-approved developer financing with our deals. Developer finance is, as the name suggests, where a developer finances a piece of the real estate you buy from him—he’s the bank. It’s most commonly offered for pre-construction properties and also in markets where bank finance is extremely difficult to get for foreign buyers and/or prohibitively expensive. For instance, in our latest deal in Playa Caracol in Panama, we have the option of developer financing on 50% of the balance. In some cases, you can also find seller financing. For instance, if a seller’s home is worth $200,000 you can offer $50,000 now and the balance over 10 years at 5%. Connect with Ronan on Instagram or Facebook